Tight market is inflating home prices

Ottawa’s housing market appears trapped in a troublesome cycle. Fewer than 1,800 residential homes and condominiums were listed for sale at the end of December, according to data published Monday by the Ottawa Real Estate Board. While this suggests reasonable options for buyers, the combined listings represent less than half of one per cent of the city’s 400,000 residences. That’s a tight market.

Worse, as far as potential buyers are concerned, the number of residential for sale signs tumbled nearly 27 per cent year over year to 1,525.

Condominiums available for resale were nearly impossible to find.

Just 267 were listed in December, down a startling 57 per cent from a year earlier.

The resale market does not include new housing developments, which helped to ease price pressures, but only somewhat.

The average sale price last year for residential properties across the city was $486,600, up roughly nine per cent from 2018, while condominiums sold for $304,200 in 2019, up 9.3 per cent from the previous year.

Incoming real estate board president Deborah Burgoyne believes upward pressure on prices is here to stay. “These supply issues will surely persist into 2020,” she says. “I don’t expect the inventory will be able to recover in the near future.”

The relative lack of supply is not a recent phenomenon. Compared to 2017, residential resale listings are down 43 per cent while the number of available condos has slumped more than 70 per cent.

Somewhat surprisingly, Ottawa’s 3,000 realtors managed to sell nearly seven per cent more properties last year than they did in 2018. The explanation: properties put up for sale simply sold much faster. Residential homes took 44 days on average in 2019 to find a buyer, compared to 57 days the previous year, while condos last year were snapped up in 45 days after initial listing, compared to 71 days in 2018.

The real estate board’s outgoing president Dwight Delahunt said properties in certain popular districts “were snapped up by prepared buyers” almost immediately, often following bidding wars.

Across the city there was wide variation in the residential resale market, ranging from a 31.5 per cent gain for the 36 properties sold last year in the district that includes Country Place, Pineglen and Crestview, to an eight per cent drop for the 109 residences sold in Bells Corners. Both of these extremes were influenced by unusual sales activity in a section of each district.

In the Country Place district, six homes sold in the area north of West Hunt Club Road and west of the Rideau River for an average of $820,500 compared to two sales in this sub-district in 2018, for just $644,000. Even so, price gains throughout the wider district were robust.

The Bells Corners district happens to include Cedar Hill and Orchard Estates, which in 2019 recorded just six sales averaging $1 million for each property compared to 12 sales in the $1 million-plus category during 2018. Most price increases in other parts of the Bells Corners district ranged from nine per cent to 22 per cent year over year.

Overall, 20 of the 46 real estate districts tracked by this newspaper registered average price rises in excess of 10 per cent with a heavy concentration in the western areas of the city. Among the geographical exceptions were Lowertown-Sandy Hill (average price of $658,200 — up 12.2 per cent), Vanier ($472,600 — up 11.3 per cent), Hunt Club-South Keys ($470,000 — a gain of 11.9 per cent) and Hunt Club-Windsor Park ($526,400, up 10.2 per cent).

Of course, a few western districts also recorded year over year reversals or were among the smallest gainers. This included the district of Carlingwood-Westboro where sales of residential properties averaged $896,800 last year, down one per cent from the same period in 2018.

There are now seven Ottawa districts in which average prices topped $800,000, compared to just three districts in 2018.